UK - One of the UK's largest pension funds, the £11.1bn (€13bn) Strathclyde local authority scheme, is to launch a multi-million-pound fund targeting local small and medium-sized enterprises (SMEs).

The £100m New Opportunities Fund will stand alongside the local government pension scheme's investment in the Scottish Loan Fund and seek to offer companies in the pension fund's catchment area either loans or equity financing.

However, Glasgow City Council spokesman Colin Mackenzie was keen to stress that the new fund would have strict terms for any investment.

"Clearly, we have to deliver the return for members, so it's not a bailout fund - the intention is to look for serious investments," he told IPE.

"We are also looking specifically for opportunities to invest where the business believes it can grow and create jobs."

The council is also looking to promote its own minimum wage initiative, with Mackenzie saying that companies paying or looking to pay the Glasgow Living Wage of £7.20 -  £1.12 higher than the national minimum - would be considered for investment.

He said discussions about the fund launch had been ongoing over the year, but acknowledged that there had been an "awful lot of talk" surrounding public sector schemes in the wake of last month's strike, and calls from the chancellor of the exchequer that schemes should invest in UK infrastructure.

"There is a feeling that the local government pension schemes - where they are funded, unlike most of the other public sector ones - clearly have an opportunity to use that money for the benefit of the local community," he said.

He said investment decisions would be made following a presentation - with a panel deciding after consulting with the local chamber of commerce, Strathclyde investment professionals and regional council workers with an understanding of the specific business sector.

Strathclyde said that it would not draw up a definitive list of companies it would invest in, as it did not want to exclude any potential applicants.

It expects companies in the construction, IT, tourism, service and haulage sectors to apply for funding.

Jacqueline Gillies, the scheme's chief pensions officer, previously said that it only allocated a "relatively small" amount of its assets to SMEs, highlighting the problems that could come with private equity investments.
 

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